Slobbiest

Friday, August 19, 2005

A Washington lobbyist who is a central figure in investigations involving House Majority Leader Tom DeLay plans to fight charges he defrauded two lenders of $60 million to buy a casino cruise line, his lawyer said on Thursday.

Jack Abramoff, a well-connected Republican lobbyist, and Adam Kidan, his partner in the $147.5 million buyout of SunCruz Casino five years ago, were indicted by a federal grand jury in Fort Lauderdale, Florida, on August 11.

His Miami attorney, Neal Sonnett, said Abramoff would plead not guilty. He also said his client knew nothing about the gangland-style murder in a Fort Lauderdale street of Konstantinos "Gus" Boulis, a Greek-immigrant entrepreneur from whom they bought the casino cruise line empire.

"He looks forward to defending himself," Sonnett told reporters after Abramoff made a brief appearance before a U.S. magistrate in Miami.

"Absolutely nothing," Sonnett added when asked what his client might be able to tell police about the 2001 killing of Boulis. Fort Lauderdale police have said they would like to interview Abramoff and Kidan about the murder.

Abramoff was not asked to enter a plea on Thursday before U.S. Magistrate Stephen Brown and his formal arraignment on the fraud charges was postponed until August 29 because he had not yet obtained a full-time attorney.

Abramoff and Kidan face one count of conspiracy to commit wire fraud and five counts of wire fraud. Each count carries a maximum punishment of five years in prison and a $250,000 fine. Prosecutors are also seeking restitution of the $60 million.

The indictment alleges they duped specialty lenders Foothill Capital and Citadel Equity Fund Ltd by pledging to invest $23 million in SunCruz in return for the $60 million loan. The indictment alleges the two men offered a fake wire transfer document as proof they had invested the money.

Abramoff is also under investigation over millions of dollars he was paid by an Indian tribe for lobbying efforts.

His case has attracted attention because of his links to DeLay, a Texas Republican, who has faced questions about his ties to lobbyists, foreign trips funded by outside groups and the use of campaign funds.

Opponents claim DeLay has engaged in unethical behavior. He has denied the allegations.

The Washington Post reported in April that a plane trip to London and Scotland by DeLay was charged to a credit card issued to Abramoff. Under House ethics rules, lawmakers are prohibited from accepting payment of trips and related expenses from registered lobbyists.

MIAMI -- The indictment this week of lobbyist Jack Abramoff in a wire fraud case here could provide an important boost to federal investigators in Washington examining the prominent Republican's activities to influence Congress and the Bush administration on behalf of Indian tribes and other clients, people with knowledge of the case said Friday.

Abramoff was released Friday from a federal correction center in Los Angeles on $2.2 million bail after he and a business associate were indicted here on charges of conspiracy and wire fraud in applying for loans in the purchase of a Florida-based casino cruise ship company that later fell into bankruptcy.

While attorneys for Abramoff, 46, and associate Adam Kidan, 41, both professed their clients' innocence in the fraud case, the six-count indictment is expected to apply pressure on the two to provide information to a separate criminal investigation in Washington examining Abramoff's work on behalf of the casino-rich tribes. Two Senate committees are also investigating Abramoff's activities.

Unlike Kidan, who was permitted to surrender to authorities in Florida and put up a $500,000 personal bond, the FBI arrested and jailed Abramoff while he was on a business trip to Los Angeles with his 12-year-old daughter, sending a clear message about the gravity of the case.

The men are charged with falsifying documents that said they had provided a cash down payment for the cruise line when they had not. Each count could get five years in prison and a $250,000 fine. Prosecutors also seek $60 million from Abramoff and Kidan, the money lost by a lender they had sought out to help finance the casino ships' purchase.

In Washington, a task force that includes the Justice Department, FBI, Internal Revenue Service and the Department of Interior inspector general has been picking through thousands of Abramoff's e-mails and lobbying records for more than a year to determine if any favors or gifts to lawmakers amounted to bribes for official actions. The two Senate committees -- Indian Affairs and Finance -- are investigating Abramoff's representation of tribes and alleged abuse of charities for political purposes.

Legal analysts agree that this first indictment is typical of government prosecutions of people who are under investigation in more than one case. The first indictment sends a signal that prosecutors are serious, and then they typically wait to see if attorneys want to begin discussions about possible cooperation. If not, they often bring another set of indictments.

"What they're looking for is how many names can they give -- and by names I mean members of Congress or other prominent people -- and what kind of message do they want to send," said Mike Missal, a former government attorney now practicing white-collar crime defense in Washington. "If just Abramoff goes down, it is not that big a deal for prosecutors. If he brings down members of Congress, it is a much more noteworthy case. That would be the ultimate target here."

Once among the most influential lobbyists in Washington, Abramoff had relationships with powerful officials in Congress and the Bush administration. He was a major campaign contributor who also lent out his sports suites to politicians for fund-raisers without ever charging a fee.

While Abramoff was close to many members of Congress, the friendship that has garnered the most attention was with House Majority Leader Tom DeLay, R-Texas.

The Florida fraud case and the Washington influence-peddling investigation also now has a key figure who could provide an investigative bridge between the two inquiries. Michael Scanlon, a public relations operative who worked with Abamoff in Florida and in Washington has been in discussions with the Department of Justice, according to people familiar with the talks but who declined to be named because of the sensitivity of the investigation.

Scanlon provided public relations advice to SunCruz Casinos, the gambling company at the center of the Florida fraud case. Once DeLay's communications director, Scanlon persuaded Rep. Robert Ney, R-Ohio, to add statements about the company to the Congressional Record at crucial times in Abramoff's acquisition of SunCruz. Ney now says he was duped.

Scanlon's potential cooperation of Scanlon with prosecutors could provide crucial evidence in the federal task force investigation of Abramoff and his lobbying. Scanlon, a key partner in Abramoff's representation of Indian tribes, might have information about meals, sporting event tickets and trips that Abramoff showered on lawmakers. Abramoff paid Scanlon more than $10 million in fees, according to documents discovered by Senate Indian Affairs investigators.

Abramoff's indictment could force the House ethics committee to postpone any investigation of DeLay, according to an official familiar with the committee's discussions. The committee has not been operating this year because of a partisan standoff, but House officials had expected the committee to finish hiring its staff and get on with business this fall.

DeLay faces no formal ethics complaint. His staff has prepared documents for the committee in an effort to clear up questions about his travel and its connection to lobbyists. "DeLay's situation is substantially complicated by the Miami indictments," the official said. "The Justice Department often will ask a parallel congressional investigation to take the back seat until the department has finished its own investigation. And if DeLay wants to call Abramoff is a witness, there's no way his lawyers will let him get near a congressional committee, ethics or otherwise."

DeLay's association with Abramoff clearly has become a concern for those in the majority leader's camp. In recent months, DeLay has been distancing himself from Abramoff. Earlier this year, DeLay told a group of conservative supporters at a private meeting that sometime shortly after SunCruz Casinos founder Konstantinos "Gus" Boulis was gunned down in Fort Lauderdale on Feb. 6, 2001, he confronted lobbyist Abramoff over his SunCruz involvement, according to people in attendance.

"Immediately he had Abramoff called in and told him, 'I want no more dealings with you,' " said conservative activist Paul Weyrich, a longtime DeLay friend, recounting a speech DeLay gave to a conservative group earlier this year. "I think he felt blind-sided by Abramoff" over the SunCruz affair.

In Los Angeles, Abramoff agreed to post $250,000 in a corporate surety bond, while his wife signed for $1 million and Abramoff's brother and father jointly signed for another $1 million. U.S. District Judge Paul Game Jr. ordered Abramoff to appear at the U.S. Attorney's Office in Fort Lauderdale Tuesday for a hearing to determine that none of the bond money comes from illegal sources. Abramoff surrendered his passport and agreed to travel nowhere but Florida and Maryland, where he lives.

MIAMI · Lobbyist Jack Abramoff made his first appearance Thursday before a federal judge in Miami since his indictment last week along with an associate on fraud charges stemming from a 2000 deal to purchase a casino cruise fleet.

Abramoff did not enter a formal plea at the brief hearing before U.S. Magistrate Judge Stephen Brown but will plead not guilty to the six-count indictment charging conspiracy and wire fraud, said Abramoff attorney Neal Sonnett.

Brown initially had set Abramoff's first court appearance in Miami for Aug. 29. But U.S. District Judge Paul Huck ordered an accelerated schedule so that the case does not languish.

Huck will hold a status conference on Aug. 26, at which he could set a trial date, Sonnett said.

Abramoff and Adam Kidan are charged with falsifying a $23 million wire transfer to make it appear they were putting a large cash stake into the purchase of SunCruz Casinos. Based on that transfer, two lenders provided $60 million toward their purchase in September 2000 of SunCruz from Konstantinos "Gus" Boulis.

Kidan has already pleaded not guilty to the fraud charges. Both Kidan and Abramoff are free on bond.

Boulis was shot to death in February 2001 in a gangland-style murder that remains unsolved. Since the federal fraud charges were announced, Fort Lauderdale detectives said they will seek interviews with both Abramoff and Kidan about the killing.

Sonnett said that Abramoff, who, unlike Kidan, has never been questioned by police about the Boulis case, will be happy to cooperate.

"He has no information about the murder," Sonnett said.

Abramoff, a well-connected Republican lobbyist and political fund-raiser, also is under investigation in Washington by a federal grand jury and by the U.S. Senate Indian Affairs Committee for deals in which he and an associate received at least $66 million from six Indian tribes to lobby for their casinos and other interests. The tribes question whether the charges were excessive.

Congressional Democrats have raised questions about Abramoff's ties to House Majority Leader Tom DeLay. The congressman has asked the House Ethics Committee to review allegations that Abramoff or his clients paid some of DeLay's overseas travel expenses.

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